PSI Oklahoma Real Estate Practice Test

How is a legal life estate typically created?

1. Through a will

2. By operation of law

3. Via a contract

4. By a court order

The correct answer is: By operation of law

A legal life estate is typically created by operation of law. This means that the establishment of the life estate occurs automatically under certain legal principles, rather than through individual actions such as a will or contract. For example, a legal life estate can arise through the joint ownership of property where one owner has the right to live in the property for their lifetime while the other co-owners hold the remainder interest. While a will can create a life estate, this process falls more under the realm of a testamentary life estate, which is a type of life estate that is specifically defined in a will and only comes into effect upon the death of the testator. Contracts can also arrange for life estates, but they do not create them by operation of law. Similarly, court orders can establish life estates in specific legal contexts, but this is not the most common method of creation. The option emphasizing operation of law directly captures the essence of how legal life estates are generally formed in accordance with existing legal statutes and principles.